Module 11-1

Pay for Performance

and Financial Incentives 11

Module 11-2

Learning Objectives

1. Explain how you would apply five motivation theories in formulating an incentive plan.

2. Discuss the main incentives for individual employees.

3. Discuss the pros and cons of commissions versus straight pay incentives for salespeople.

Module 11-3

Learning Objectives

4. Describe the main incentives for

managers and executives.

5. Name and define the most popular

organization-wide variable pay

plans.

6. Outline the steps in designing

effective incentive plans.

Module 11-4

Money and Motivation

Strategy

Performance

Incentive Pay

Module 11-5

Explain how you would apply

five motivation theories in

formulating an incentive

plan.

Module 11-6

Motivation and Incentives

• Maslow’s

Hierarchy of

Needs

Module 11-7

Motivation and Incentives

• Herzberg’s

Two-Factory

Theory

• Deci and

demotivators

Hygiene

Motivators

Module 11-8

Motivation and Incentives

• Expectancy

Theory, Victor

Vroom

Module 11-9

Motivation and Incentives

• Behavior modification

• Incentive pay terminology

• Employee incentives and the law

Module 11-10

Review

• Money and motivation

• Motivation theories

• Incentives

• Terminology

• The law

Module 11-11

Discuss the main incentives

for individual employees.

Module 11-12

Individual Employee Incentive

and Recognition Programs

• Merit pay as an

incentive

oDifferential pay

increases

oMerit pay options

• Piecework plans

oStraight

piecework

oStandard hour

plans

oPros and cons

Module 11-13

Individual Employee Incentive

and Recognition Programs

• Incentives for professional employees

• Nonfinancial and recognition-based

awards

o Incentives managers can use

• Online and IT-supported awards

• Job design

Module 11-14

Review

• Piecework

• Merit pay

• Incentives for professionals

• Nonfinancial rewards

• Online

• Job design

Module 11-15

The Pros and Cons of

Commissions vs. Straight

Pay Incentives for

Salespeople

Module 11-16

Incentives for Salespeople

• Salary plan

• Commission plan

• Combination plan

• Maximizing sales force results

• How effective are your incentives?

Module 11-17

Review

• Types of sales

incentives

• Maximizing results

• Effectiveness

Module 11-18

Describe the main incentives

for managers and executives.

Module 11-19

Incentives for Managers

and Executives

• Strategy and the executive’s long-term and total rewards package

• Sarbanes-Oxley Act

• Short-term incentives, annual bonus

oEligibility

oFund size

o Individual performance

oFormula

Module 11-20

Incentives for Managers

and Executives

• Strategic long-term incentives

oStock options

oStock option problems

oOther stock plans

oEthics and incentives

• Other executive incentives

Module 11-21

Review

• Strategy and long-term incentives

• Federal law

• Short-term incentives

• Strategic long-term incentives

• Other incentives

Module 11-22

The Most Popular

Organization-wide Variable

Pay Plans

Module 11-23

Team & Organization-wide

Incentive Plans

• Designing team incentives

oEngineered standards

oPros and cons

• HR inequities that undercut team

incentives

Module 11-24

Team & Organization-wide

Incentive Plans

• Profit-sharing plans

• Scanlon plans

• Other gainsharing plans

• At-risk pay plans

• Employee stock ownership plans

Module 11-25

Review

• Team incentives

• Inequities

• Profit-sharing

• Scanlon and gainsharing

• At-risk

• ESOPs

Module 11-26

The Steps in Designing

Effective Incentive Plans

Module 11-27

The Five Building Blocks of

Effective Incentive Plans

• Common sense

• Linkages

• Effort Rewards

• Standards

• Contract

• Measurement

Module 11-28

Review

Sense

Linkages

Motivation Standards

Scientific